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Course Details

Understanding the Consolidation of Variable Interest Entity Rules - FASB Interpretation No. 46R (FASB ASC Topic 810) (Course Id 296)

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Author : Steven C Fustolo, CPA, MBA
Status : Production
CPE Credits : 12.0
IRS Credits : 0
Price : $107.95
Passing Score : 70%
Primary Subject-Field Of Study:

Accounting - Accounting and Auditing for Course Id 296

Description :

This course presents the consolidation of variable interest entity rules found in ASC 810, Consolidation (previously found in FASB Interpretation No. 46R, Consolidation of Variable Entities-An Interpretation of ARB No. 51, as amended by FASB No. 167, Amendments to FASB Interpretation No. 46R (FIN 46R)), in a comprehensive format. Following the review of the old rules for consolidation of special purpose entities (SPEs) and the background on consolidations are the general rules of FIN 46R. These include the application of FIN 46R and the special exemptions from FIN 46R. The basic rules of FIN 46R, which include three requirements, are covered in complete detail throughout the remaining course material.

Usage Rank : 0
Release : 2014
Version : 1.0
Prerequisites : General understanding of accounting and U.S. GAAP
Experience Level : Overview
Additional Contents : Complete, no additional material needed.
Additional Links :
Advance Preparation : None
Delivery Method : Self-Study
Intended Participants : Anyone needing Continuing Professional Education (CPE)
Revision Date : 30-Jun-2014
NASBA Course Declaration : Participants must complete the final examination within one year of purchase and with a minimum passing grade of 70% or better to receive CPE credit unless otherwise noted on the Course History page (i.e. California Ethics must score 90% or better). After logging in click on the Course History links on your My Courses page for the Begin date and Expire date for the Final Exam.
Approved Audience :

NASBA Registry - 296

Keywords : Accounting, Understanding, Consolidation, Variable, Interest, Entity, Rules, FASB, Interpretation, No., 46R, FASB, ASC, Topic, 810, cpe, cpa, online course
Learning Objectives :

Section 1
Introduction

After reading the Section 1 course material, you will be able to:
    • Recognize consolidated vs. combined statements
    • Identify a variable interest entity
    • Recognize how the consolidation rules apply to a controlling financial interest
    • Identify some of the special exemptions found in FIN 46R
    • Identify the elements of a business

Section 2
Rules of FIN 46R

After reading the Section 2 course material, you will be able to:
    • Identify the general rule of FIN 46R for consolidation
    • Recognize the three requirements to consolidate under FIN 46R
    • Identify some the conditions and situations for an entity to be considered a VIE
    • Recognize the qualitative and quantitative methods to demonstrate sufficiency of equity

Section 3
Requirement 2 for Consolidation: An Entity Must Have a Variable Interest in the VIE

After reading the Section 3 course material, you will be able to:
    • Identify a variable interest
    • Identify examples of a variable interest

Section 4
Requirement 3 for Consolidation: Determining the Primary Beneficiary of the VIE

After reading the Section 4 course material, you will be able to:
    • Recognize the rules for determining a primary beneficiary
    • Identify some of the related parties that are subject to FIN 46R’s related party rule
    • Identify the designated primary beneficiary under the tie breaker rule

Section 5
Initial Test and Measurement of the VIE By the Primary Beneficiary

After reading the Section 5 course material, you will be able to:
    • Identify how to perform the initial measurement to consolidate a VIE • Recall how a VIE’s stockholder’s equity should be presented on a consolidated balance sheet
    • Identify how to deconsolidate under FIN46R
    • Identify the ways in which to avoid consolidation under FIN46R.
Course Contents :

 

 

Section 1

Introduction

Background

The Old Rules for Consolidations and SPEs             

Overview of GAAP Rules for Investments and Consolidations

Consolidations and Combined Statements

Exceptions to the More Than 50% Ownership Test- Consolidation

Exception 1: Entities Controlled by Contract

Exception 2:  General Partner in a Limited Partnership 

Exception  3:  Miscellaneous Transactions Involving Research and Development Arrangements and Rabbi Trusts

Exception 4: The Variable Interest Entity Rules- FIN 46R

FASB Interpretation No. 46R- Consolidation of Variable Interest Entities-An Interpretation of ARB No. 51

Background on FIN 46R

Key Changes Made to Interpretation No.  46R by FASB No. 167

What is a VIE?

General Rules of FIN 46R

Application of FIN 46R

Special Exemptions from FIN 46R

Review Questions and Suggested Solutions

 

Section 2

Rules of FIN 46R

Basic Rules for Consolidation- 3 Requirements

Requirement 1 for Consolidation: There Must Be a Variable Interest Entity (VIE)

Definition of a VIE

Condition 1: The Total Equity Investment at Risk is Not Sufficient

10 percent Presumption Rule

Qualitative Methods for Determining the Sufficiency of Equity

Quantitative Method for Determining the Sufficiency of Equity

Quantitative Method 1- Expected  Losses Method

Reconsideration of VIE Status

Development Stage Reporting enterprise- VIE Test

Condition 2: VIE Based on Equity Holders Lacking Risks and Rights of Ownership

Review Questions and Suggested Solutions

 

Section 3

Requirement 2 for Consolidation: An Entity Must Have a Variable Interest in the VIE

Definition of a Variable Interest

Fees Paid to Decision-Makers or Service Providers

Leases

Receivables

Typical Degree of Variability- Variable Interests

Variable Interests in Specified Assets of an Entity

Implicit Variable Interests

Review Questions and Suggested Solutions

 

Section 4

Requirement 3 for Consolidation: Determining the Primary Beneficiary of the VIE

Definition of a Primary Beneficiary

Rules for Determining the Primary Beneficiary

Related Party Rules- Primary Beneficiaries

The Lease Issue- Implicit Variable Interests

Review Questions and Suggested Solutions

 

Section 5

Initial Test and Measurement of the VIE by the Primary Beneficiary

Deconsolidating

Updating the Primary Beneficiary Test

Logistical Issues of Consolidation

Disclosures Under FIN 46R                           

Effective Date and Transition Requirements of FIN 46R

Subsidiary (VIE) Only Financial Statements

Avoiding the Consolidation Rules Under FIN 46R

Other Issues

Review Questions and Suggested Solutions

 

Glossary

FASB Course 296 Home: https://www.cpethink.com/fasb-cpe-for-cpas
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